Relaxing Sunday trading laws – smaller UK retailers concerned about potential impact
In a bid to kickstart the UK economy, the government is considering changes to Sunday trading laws. We examine what is being proposed, and the potential impact on smaller retailers.
There’s no doubt that the COVID-19 lockdown has hit the UK economy hard, with the Organisation for Economic Co-operation and Development (OECD) recently warning that the UK is likely to be the hardest hit among the world’s major economies, with a forecast 11.5% slump in GDP.
To help catalyse the country’s economic recovery, the government is considering a variety of measures, with one of the most controversial being temporarily changing the UK’s Sunday trading laws, which have stayed constant since they were established in 1994.
This article will explain the current laws, the proposed changes, and why many smaller retailers are so concerned that this could impact their sales.
What are the current laws?
The current rules on Sunday trading are set out in the Sunday Trading Act 1994.
There are three key points:
- Small shops in England and Wales (those under 280 square metres) are allowed to open at any time (including all day Sunday if they wish)
- Large shops (those over 280 square metres) can open on Sundays but only for 6 consecutive hours between 10am and 6pm
- Certain types of shops are exempt from these restrictions, these include shops in airports/railway stations and service stations
There are also no trading hours restrictions in Scotland.
What is the government proposing?
According to a report in The Times, the government is considering suspending the laws on Sunday trading for a year, allowing larger supermarkets in particular to open all day on Sunday.
Currently, the plan is only one of a range of options being considered, so there is little detail on whether, for example, department stores would also be allowed to open all day.
The Times report stated that the plan is being supported by the Prime Minister Boris Johnson, his chief adviser Dominic Cummings, the Chancellor Rishi Sunak, and the Business Secretary Alok Sharma.
However, The Guardian noted that the Conservative chief whip Mark Spencer (a key part of whose job is persuading Conservative MPs to vote for what the government wants to do) expects the plan to be opposed by Labour and more traditionally minded Conservative MPs.
Have there been previous attempts to change the law?
The laws on Sunday trading were suspended during the London 2012 Olympics, on the grounds that extra tourist spending would boost the UK economy.
However, David Cameron’s attempts to change Sunday trading laws in 2016 may be more relevant to the current situation.
Under the Cameron plan, local councils would have been given more power to decide which shops were allowed to open for longer on Sundays.
It was, however, soundly defeated as 27 Tory MPs voted against the government and Labour and the Scottish National Party also opposed the move.
It’s likely that a similar coalition would form if the government tried to push through the new plans, but the current economic situation is of course radically different to 2016.
What are UK small businesses saying?
Smaller retailers such as convenience stores are particularly concerned about the potential impact of their much larger rivals being allowed to open all day on Sunday.
James Lowman, the Chief Executive of the Association of Convenience Stores (ACS), stated that “the majority of the public are in favour of the existing Sunday trading regulations” and that “changing the current laws would only serve to displace trade from the local shops that have been keeping communities going during this pandemic”. He also noted that local shops and other retailers have already been far impacted by new safety measures than larger stores, and that many have had to reduce their opening hours to re-stock and clean their stores.
The Union of Shop, Distributive and Allied Workers (Usdaw), whose members would be significantly affected by any change in the law, was also vocal in its opposition. Paddy Lillis, the Usdaw General Secretary argued that: “This attempt to undo a long-held compromise on Sunday trading is misguided. The last thing the retail industry needs is longer trading hours, there is no economic case for this and it will put extra pressure on the retail workers who have worked so hard throughout the crisis.”
Lillis also criticised the economic rationale for the plan, stating that: “Retailers have mixed views over the benefits of opening longer on Sundays and we have repeatedly demonstrated that it would be bad for business. Opening for longer will increase overheads but not necessarily take any more cash through the tills. The fact is that customers will not have more to spend just because the shops are open for longer.”
Rick Smith, the Managing Director of business rescue and recovery specialists Forbes Burton, was also concerned that the plan could negatively impact UK small businesses, commenting that: “The revision will mainly benefit larger stores who can easily cope with the capacity and staffing, but it could hit smaller retailers as consumers are more likely to shop at larger stores. The reason many smaller businesses have longer opening hours on a Sunday and survive is that they become the defacto choice out of hours when supermarkets and large-scale retailers are closed.”
He added that, if this did occur, there would be a risk of job losses and the loss of local shops that “often act as community hubs, combining post offices, delivery pick-up stations and also providing services like the paying of bills.”
There are therefore multiple reasons for UK small businesses to be concerned about the proposed changes to Sunday trading laws, and small retailers should be especially worried.
There is also scepticism in many small businesses that, if the change is forced through, then it would only last for a year instead of turning into a permanent arrangement.
What else could be done to boost the UK economy?
The change to Sunday trading laws is only one of a range measures being considered to aid the UK’s economic recovery. Other plans include fast-tracking approval for cafes and pubs to serve food and drink outside, and an overhaul of the planning process to speed up approval for new developments.
Many small businesses though are still concerned about the impact that the current 2m social distancing protocols could have once they re-open for business, and the government is coming under increasing pressure to reduce social distancing to 1.5m or even 1m.
Indeed, Mike Cherry, the National Chairman of the Federation of Small Businesses (FSB) has warned that “many in the hospitality and leisure sectors simply won’t be able to turn a profit if the blanket two metre rule remains in place”. He added that “small businesses across some European countries have benefited from a shortening of this distancing benchmark as part of the unlocking process”, stressing that “time is of the essence during these critical summer months”.
And then there’s Brexit. With Michael Gove recently “formally confirming” that the UK will not seek an extension to the transition period, many small businesses are extremely worried about the impact this could have on an economy that even, in the best case scenario, would be continuing to recover at the start of 2021.
Barry Cumberlidge, the co-founder of small business specialist Moose Accounting, points out that “the last thing small businesses need is another shock in the next six to nine months” and that “the Brexit deadline should be extended to give small businesses the breathing room to recover balance sheets”.
Many small businesses will no doubt agree.